Wednesday, January 31, 2018

Extending previous session losses, Indian rupee weakened against dollar on Tuesday, due to sustained bouts of month-end dollar demand from importers and banks. Weak domestic equities markets also weighed on the domestic unit. Traders remained cautious with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Fiscal deficit may be slightly higher than FY18 target. He also said the government may settle for slightly higher fiscal deficit in 2018-19 as well. Investors also turned their attention to US President Donald Trump’s State of the Union speech and a Federal Reserve policy meeting. However, dollar’s weakness overseas capped rupee’s losses.

On the global front, the euro rose against dollar on Tuesday, buoyed by data showing that the euro zone economy recorded its strongest rate of annual growth since the global financial crisis in the fourth quarter.